Online Booze Sales Industry Expected to Hit $614 Million in 2016

Austin Ray

THE GIST
More and more people are forgoing trips to the liquor store in favor of buying their booze through their computer or smartphone. According to market research firm IBISWorld, online sales of beer, wine, and liquor are expected to reach $614 million in 2016, which represents an 11.7% annual growth rate over the last five years. Revenue is expected to grow 6.5% this year alone, according to the firm, specifically “due to growing consumer demand for craft beer.”

WHY IT MATTERS
Booze delivery apps like—and no, we're not making any of these up—Drizly, Saucey, and Thirstie seem to popping up with greater frequency these days. It’s not just startups, though. Online leviathan Amazon has been exploring different alcohol delivery methods in varying markets for some time now. On top of that, the population of drinking aged people, particularly those younger consumers who have fully embraced technology, is expanding. And on top of that, there are all sorts of great local shops—like St. Louis’ The Wine and Cheese Place, pictured above—that ship all over.

Taking all that into account, IBISWorld expects the online liquor sales industry to continue growing over the next five years. As a consumer who likes alcohol, but sometimes doesn’t want to move more than 10 feet from the couch, this is an exciting prospect.
 
But—And isn’t there always a “but?”—this upward trajectory actually runs somewhat counter to the narrative that has emerged in the last few years. Setting aside the success stories, like Drizly, a number of online services have shut down or dealt with cease and desists over the course of this five-year growth period (Beerjobber, Liquid Solutions, and Ultra among them). As it pertains to online orders for out-of-state deliveries, mail carrier companies, too, have their own restrictions limiting what they can deliver, to whom, and where, many based on archaic laws. Even Amazon has had issues. In 2015, Amazon Fresh suspended its popular alcohol sales in Seattle, keeping mum the reason. 
 
The particular driving forces behind each of these closures, cease and desists, and suspensions likely vary. However, selling and delivering alcohol through the web is a bit of a regulatory tightrope, and keeping balanced is a tricky proposition. IBISWorld acknowledges this in its report. “State-by-state variations in regulations for interstate alcohol distribution have posed a key hurdle for the industry,” says Darshan Kalyani, the firm’s industry analyst.
 
As such, the types of snafus that trip up online delivery servers are likely to keep arising, as the industry tries to blossom around them. But the demand for liquor online is clearly there. And it seems it’s going to grow regardless. The market’s full potential, though, likely won’t be realized without jumping a few regulatory hurdles first. 
 
—Dave Eisenberg
 
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The U.S. Online Beer, Wine & Liquor Sales Industry is Expected to Earn Revenue of $614 million in 2016 [IBISWorld]